Strategy Formulation And Implementation

7,098 views
6,821 views

Published on

Published in: Business
0 Comments
4 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
7,098
On SlideShare
0
From Embeds
0
Number of Embeds
29
Actions
Shares
0
Downloads
279
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide
  • 1
  • Strategy Formulation And Implementation

    1. 1. Chapter 8 Strategy Formulation and Implementation
    2. 2. Thinking Strategically <ul><li>To help managers answer questions such as: </li></ul><ul><li>Where is the organization now? </li></ul><ul><li>Where does the organization want to be? </li></ul><ul><li>What changes are among competitors? </li></ul><ul><li>What courses of action will help us achieve our goals? </li></ul><ul><li>Answers define an overall direction for the organization's grand strategy. </li></ul>
    3. 3. Grand Strategy <ul><li>General plan of action to achieve long-term objectives </li></ul><ul><li>1. Growth </li></ul><ul><li>2. Stability </li></ul><ul><li>3. Retrenchment. </li></ul>
    4. 4. Growth <ul><li>Can be promoted internally by investing in expansion or externally by acquiring additional business divisions. </li></ul>
    5. 5. Stability <ul><li>Remain same size or grow steadily and in a controlled fashion. </li></ul>
    6. 6. Retrenchment <ul><li>Forced decline by either shrinking current business units or selling off or liquidating entire businesses. </li></ul>
    7. 7. Global Strategy <ul><li>Globalization : product design and advertising strategies are standardized around the world </li></ul><ul><li>Multidomestic : adapt product and promotion for each country </li></ul><ul><li>Transnational : combine global coordination with flexibility to meet specific needs in various countries. </li></ul>
    8. 8. Purpose of Strategy <ul><li>CORE COMPETENCE: something the organization does especially well in comparison to its competitors </li></ul><ul><li>Superior research and development </li></ul><ul><li>Mastery of a technology </li></ul><ul><li>Superior customer service. </li></ul>
    9. 9. Purpose of Strategy <ul><li>SYNERGY: when organizational parts interact to produce a joint effect that is greater than the sum of its parts acting alone. </li></ul>
    10. 10. Purpose of Strategy <ul><li>Value Creation = use core competence and synergy to provide increased benefits received with lower costs paid. </li></ul>
    11. 11. Levels of Strategy <ul><li>Corporate </li></ul><ul><li>Business </li></ul><ul><li>Functional. </li></ul>
    12. 12. Corporate-Level Strategy (&quot;What business are we in?&quot;) <ul><li>Acquisition of new businesses </li></ul><ul><li>Additions or divestment of business units, plants, or product lines </li></ul><ul><li>Joint ventures with other companies in new areas. </li></ul>
    13. 13. Business-Level Strategy (&quot;How do we compete?&quot;) <ul><li>Advertising </li></ul><ul><li>Direction and extent of R&D </li></ul><ul><li>Product changes </li></ul><ul><li>New product development </li></ul><ul><li>Equipment and facilities </li></ul><ul><li>Expansion or contraction of product lines. </li></ul>
    14. 14. Function-Level Strategy (&quot;How do we support business-level strategy?&quot;) <ul><li>Production </li></ul><ul><li>Distribution </li></ul><ul><li>Finance. </li></ul>
    15. 15. Strategy Formulation <ul><li>Development of the firm's goals and a specific strategic plan </li></ul><ul><li>Assessing the external environment and the internal problems </li></ul><ul><li>Integrating the results into goals and strategy. </li></ul>
    16. 16. Strategy Implementation <ul><li>The accomplishment of the strategic plan. </li></ul>
    17. 17. The Strategic Management Process
    18. 18. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul><ul><li>Scan External </li></ul><ul><li>Environment </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment
    19. 19. Situation Analysis: SWOT <ul><li>Strengths (Internal) </li></ul><ul><li>Weaknesses (Internal) </li></ul><ul><li>Opportunities (External) </li></ul><ul><li>Threats (External) </li></ul>
    20. 20. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul>Scan External Environment <ul><li>Define New: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment <ul><li>Formulate </li></ul><ul><li>Strategy: </li></ul><ul><li>Corporate </li></ul>
    21. 21. Formulating Corporate-Level Strategy
    22. 22. Portfolio Strategy <ul><li>The organizational mix of SBUs and product lines to provide synergy and a competitive advantage. </li></ul>
    23. 23. The BCG matrix evaluates SBUs along two dimensions: <ul><li>Business growth rate how rapidly the entire industry is growing </li></ul><ul><li>Market share defines if an SBU has a larger or smaller market share than competitors </li></ul><ul><li>Provides four categories to judge SBUs. </li></ul>
    24. 24. Star Cash Cow Dog Problem Child High High Low Low Business Growth Rate Market Share
    25. 25. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul>Scan External Environment <ul><li>Define New: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment <ul><li>Formulate </li></ul><ul><li>Strategy: </li></ul><ul><li>Corporate </li></ul><ul><li>Business </li></ul>
    26. 26. Formulating Business-Level Strategy Porter's Competitive Forces
    27. 27. Potential New Entrants Threat of new entrants
    28. 28. Potential New Entrants Buyers Bargaining power of buyers Threat of new entrants
    29. 29. Suppliers Potential New Entrants Buyers Bargaining power of suppliers Bargaining power of buyers Threat of new entrants
    30. 30. Substitute Products from Other Industries Suppliers Potential New Entrants Buyers Threat of substitute products Bargaining power of suppliers Bargaining power of buyers Threat of new entrants
    31. 31. Substitute Products from Other Industries Suppliers Potential New Entrants Buyers The Firm’s Rivalry versus Industry Competition Threat of substitute products Bargaining power of suppliers Bargaining power of buyers Threat of new entrants
    32. 32. Porter's Competitive Strategies <ul><li>Differentiation </li></ul><ul><li>Cost Leadership </li></ul><ul><li>Focus. </li></ul>
    33. 33. Product Life Cycle <ul><li>1. Introduction </li></ul><ul><li>2. Growth </li></ul><ul><li>3. Maturity </li></ul><ul><li>4. Decline. </li></ul>
    34. 34. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul>Scan External Environment <ul><li>Define New: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment <ul><li>Formulate </li></ul><ul><li>Strategy: </li></ul><ul><li>Corporate </li></ul><ul><li>Business </li></ul><ul><li>Functional </li></ul>
    35. 35. Formulating Functional-Level Strategy Action plans adopted by major departments to support the business-level strategy to achieve the organization's strategic goals.
    36. 36. Putting Strategy Into Action
    37. 37. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul>Scan External Environment <ul><li>Define New: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment <ul><li>Formulate </li></ul><ul><li>Strategy: </li></ul><ul><li>Corporate </li></ul><ul><li>Business </li></ul><ul><li>Functional </li></ul><ul><li>Implement </li></ul><ul><li>Strategy via </li></ul><ul><li>Changes in: </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul>
    38. 38. Leadership <ul><li>The ability to influence employees to support strategy implementation. </li></ul>
    39. 39. Structural Design <ul><li>Managers' responsibilities and authority </li></ul><ul><li>Consolidation of facilities, departments, and divisions </li></ul><ul><li>Task design </li></ul><ul><li>Production technology. </li></ul>
    40. 40. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul>Scan External Environment <ul><li>Define New: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment <ul><li>Formulate </li></ul><ul><li>Strategy: </li></ul><ul><li>Corporate </li></ul><ul><li>Business </li></ul><ul><li>Functional </li></ul><ul><li>Implement </li></ul><ul><li>Strategy via </li></ul><ul><li>Changes in: </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Human </li></ul><ul><li>Resources </li></ul>
    41. 41. Human Resources <ul><li>Recruitment </li></ul><ul><li>Selection </li></ul><ul><li>Training </li></ul><ul><li>Transfers </li></ul><ul><li>Promotions </li></ul><ul><li>Layoff or separation. </li></ul>
    42. 42. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul>Scan External Environment <ul><li>Define New: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment <ul><li>Formulate </li></ul><ul><li>Strategy: </li></ul><ul><li>Corporate </li></ul><ul><li>Business </li></ul><ul><li>Functional </li></ul><ul><li>Implement </li></ul><ul><li>Strategy via </li></ul><ul><li>Changes in: </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Human </li></ul><ul><li>Resources </li></ul><ul><li>Information </li></ul><ul><li>and Control </li></ul><ul><li>Systems </li></ul>
    43. 43. Information and Control Systems <ul><li>Reward systems </li></ul><ul><li>Pay incentives </li></ul><ul><li>Budgets </li></ul><ul><li>Information systems </li></ul><ul><li>Rules, policies, and procedures. </li></ul>
    44. 44. <ul><li>Evaluate </li></ul><ul><li>Current: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Strategies </li></ul>Scan External Environment <ul><li>Define New: </li></ul><ul><li>Mission </li></ul><ul><li>Goals </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Opportunities </li></ul><ul><li>Threats </li></ul><ul><li>Identify </li></ul><ul><li>Strategic </li></ul><ul><li>Factors: </li></ul><ul><li>Strengths </li></ul><ul><li>Weaknesses </li></ul>Scan Internal Environment <ul><li>Formulate </li></ul><ul><li>Strategy: </li></ul><ul><li>Corporate </li></ul><ul><li>Business </li></ul><ul><li>Functional </li></ul><ul><li>Implement </li></ul><ul><li>Strategy via </li></ul><ul><li>Changes in: </li></ul><ul><li>Leadership </li></ul><ul><li>Culture </li></ul><ul><li>Human </li></ul><ul><li>Resources </li></ul><ul><li>Information </li></ul><ul><li>and Control </li></ul><ul><li>Systems </li></ul>
    45. 45. Implementing Global Strategies <ul><li>Flexibility and communication are mandatory skills in the international arena </li></ul><ul><li>Structural design must merge with foreign cultures and link operations </li></ul><ul><li>Information and control systems must fit the needs and incentives within local cultures </li></ul>
    46. 46. Implementing Global Strategies <ul><li>Human resource management face problems not confronted in North America such as: </li></ul><ul><li>Labor laws </li></ul><ul><li>Guaranteed jobs </li></ul><ul><li>Cultural traditions of keeping unproductive on the job. </li></ul>

    ×